Thanks to the exploits of Tesla, Porsche and Polestar, it has been established that electric vehicles are cool, but the next major obstacle is to make them affordable for the masses. With the internal combustion engine having decades of head start in terms of scale and costs, EVs have had to play catch up.

Now that Volkswagen is finally walking the talk with the ID range of all-electric models. Europe’s biggest manufacturer is sparring no expense in taking on the key factors of mass EV adoptionacquisition costs, running costs, residue value and total cost of ownership. And though these arguments are made in the context of Germany, the doubts surrounding EV ownership are common to car buyers around the world – something which Malaysian automotive policymakers can perhaps pick up on.

Buying costs

A recently updated ‘environmental bonus’ offered in Germany sees consumers receiving rebates of between 5,570 and 6,570 euros (RM 26,670 to RM32,460) for the purchase of an EV. For example, an ID.3 Pure model (330 km in range) will cost less than 30,000 euros – appreciably lower than the price of a Mk7-based e-Golf at 36,900 euros with 231 km of range per charge.

In fact, a base model ID.3 in Germany can be had from just 23,430 euros which is below the price of a comparable combustion engine powered model such as the Golf Life 1.5-litre TSI and the Golf Life 2.0-litre TDi. The conclusion is that with some initial government incentives, EVs can be comparable in price to combustion engine models, and that the uptake in adoption would then drive the cost of EVs lower.

Running costs

Although the costs of wear and tear are somewhat higher for EV as they require more costly tires with optimised rolling resistance, these are more than compensated for by lower costs for insurance, vehicle tax and maintenance in Germany.

Like any EV, the ID.3 does not require an oil change and only needs to be taken to the workshop for inspection every two years, regardless of mileage. In terms of insurance, the ID.3 is rated three classes better than comparable combustion engines in Germany, which equates to savings of around 200 euros per year, subject to no-claims class and mileage. Overall, the ID.3 has a running cost advantage of around 50 euros per month or 600 euros per year over comparable combustion engine models.

Residue value

According to Volkswagen, EVs were less stable in value than their combustion engine counterparts partly due to the low market volume (barely any used EV market) and partly to the rapidly improving battery technology.

This is changing in Germany as the demand for pre-owned EVs for everyday use has been rising – a trend that is likely to continue in the coming years. The ID.3’s range and charging capacity are sufficient for many German customers, and battery technology is expected to develop more slowly in the coming years, so that there will no longer be a major efficiency between new and used EVs. The eight-year battery warranty (over 160,000 km) also offers additional peace of mind.

Industry experts are forecasting residual values of the ID.3 to be roughly on par with those of comparable oil burners.

Total cost of ownership

Based on the factors presented, Volkswagen is confident that the total cost of ownership of an ID.3 is below that of what customers would fork out for over the ownership of a comparable combustion engine model in Germany, taking into consideration the government-supported purchasing rebates at the present time. Volkswagen is also convinced that EVs will be competitively priced even without these incentives in the longer term.

(Before many parts of Europe went into partial ‘lockdown’, the ID.3 was scheduled to hit the market this coming summer).


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Denis Wong
In the age of misinformation and spin, Denis prefers candour and a counterpoint, because the truth matters.